The Different Types of Stock Market Orders

By Stock Research Pro • November 6th, 2008

The Following is a list of the types of stock market orders you can place when buying or selling stock . Please consult with a financial expert to determine which approach is best given your investment needs.

Market Order - Under a market or “unrestricted order”, the broker is required to purchase or sell the stock immediately regardless of the current price. A market order guarantees execution and is the quickest and least expensive way in which you can complete your order. A market order may not be recommended for stocks with low trading volume as, for those stocks, the ask price can be much higher than the market price, resulting in a large spread. In volatile markets you risk the possibility of not getting a price close to the most recently listed.

Stop Loss Order – Designed to protect investors from losses due to a drop in stock prices, a stop loss order converts to a market order when a specified price (which is below the current market value) level is reached. At that time the broker is required to sell the stock. If the price of the stock rises, the stop loss order is not executed.

Trailing Stop Order - As opposed to the stop loss order, the trailing stop order was designed to protect your profit. With a trailing stop order, a stop price is set as either a spread in points or a percentage of current market value. A trailing stop order converts to a market order when stock price falls by the percentage dictated in the order. The broker then sells the stock.

Limit Order - With a limit order the broker purchases or sells a particular stock at a specified price. If the price is reached, the order is executed. Limit order prevents the investor from buying or selling a stock at a price higher or lower than desired. The limit order provides investors with entry and exit points through setting the prices.

Day Order - Unless the investor give the broker different instructions, orders to buy or sell stock are day orders, meaning they are good through the end of that trading day only.

Good Till Canceled (GTC) Order – Unlike day orders, a GTC order is valid until the order is completed or canceled by the investor.

All or None Order (AON) – With AON order the broker is required to complete the entire order or none of it. This type of order is commonly used for thinly traded stocks to safeguard a purchase by providing the guarantee that the investor either receives all of the stock or none at all.

More inforimation on stock market orders


The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.


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